Labour are calling for George Osborne to prevent the Royal Back of Scotland giving bumper bonuses worth more than salary levels to senior staff members.

Chancellor George Osborne with Danny Alexander in December last year.

Royal Bank of Scotland, 81% owned by the taxpayer, is expected to invoke a clause in the new EU rules on bankers bonuses whereby any bonus worth twice the level of annual salary can only be awarded with shareholder approval, The Financial Times reports.

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Bankers could face a cap on their bonuses as early as next year after EU representatives reached the first agreement of its kind to curb pay in the financial sector.

The provisional agreement, announced after late-night talks between EU officials, would see bonuses capped at one full years' salary, but can rise to two years' pay with the permission of shareholders.

The cap is part of wider controls that will force banks to create larger cash buffers against future shocks.

But it represents a setback for the British government, which has long tried to protect its large financial sector from absolute limits on bonuses.

The HSBC building in Canary Wharf, London Credit: REUTERS/Kieran Doherty

More than 10% of shareholder votes went against HSBC's pay report at its annual meeting today. It comes after the banking giant's boss paid himself £7.5 million in pay and bonuses last year.

The intensity of criticism for the company's renumeration policies was down from 2010 when nearly 19% of shareholder voted against the pay report.

HSBC's chairman Douglas Flint appeared to defend the bank's high rewards, saying: "We continued to develop a truly meritocratic culture because as international competition for the best talent intensifies, we need to ensure that HSBC is making the most of the skills and abilities of our people."